The Sensitivity of Poverty Trends to Dimensionality and Distribution Sensitivity in Poverty Measures - District Level Analysis for Pakistan

The first Sustainable Development Goal is to end poverty and so there is great interest in studying trends in poverty at both the national and sub-national level. A key feature of recent poverty measurement is that conventional (money metric) approaches are being supplemented or replaced by multi-dimensional approaches. There is also increased interest in distributionally sensitive measures. This study examines whether the same trends in poverty are apparent when the analysis uses either the conventional or the multidimensional approach, and distributionally sensitive versus insensitive poverty measures. The analysis is based on six surveys for Pakistan fielded between 2004 and 2015, and considers trends at the national, provincial, and district level. The multidimensional measures show a smoother fall in national poverty rates while the conventional measures show rising poverty up until 2008 and then a sharper fall. Almost half of all districts show opposite trends in poverty, if conventional rather than multidimensional measures are used, in two or more of the five inter-survey spells, irrespective of whether distribution-sensitivity is considered or not. Thus, apparent trends are sensitive to the poverty measurement approach used, so public policy analysts should be cautious in the conclusions they draw from poverty estimates.